Decision LeadershipGuiding Teams to High-Quality Decisions in
Challenging Organizational and Analytical Contexts
®
© 2007 Strategic Decisions Group www.sdg.com
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Meet Today’s Speakers
Carl SpetzlerCEO, SDG
Program Director, SDRM Certificate Program
Lecturer in Economics, Stanford GraduateSchool of Business
Jennifer MeyerSenior Engagement Manager, Executive
Education Practice, SDG
Paul MarcaDeputy Director,
Stanford Center for ProfessionalDevelopment
Bruce JuddDir. of ExecutiveEducation, SDG
Adjunct Professor, Kellogg GraduateSchool of Mgmt.
Hannah WinterPartner, SDG
Associate Program Director, Stanford
Strategic Decision and Risk Management (SDRM) Certificate
Program
®
© 2007 Strategic Decisions Group www.sdg.com
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When the stakes are high and organizational
alignment is difficult, you need decision leadership.
In general these situations are challenging organizationally, and they are analytically complex, uncertain, and dynamic.
High stakes
• A bad decision will have lasting negative consequences
• There is time to make a high-quality decision
Multiple parties
• Stakeholders
• Information providers
• Individuals who will ensure the decision “sticks”
Examples
• New business strategy
• New products or services
• Response to competition
• Management of a portfolio
®
© 2007 Strategic Decisions Group www.sdg.com
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These challenging situations call for decision
leadership to ensure a timely and high-quality result.
Decision Task Leadership
Decision Leader
The decision leader plans and in many cases leads the tasks preceding the decision; in some cases the roles are combined.
Decision
Maker(s)
Gathering Information
Facilitating Meetings
Analyzing & Synthesizing
Planning and Managing
Communicating Results
®
© 2007 Strategic Decisions Group www.sdg.com
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Poll 1
What role do you play most frequently in your organization's decision making?
• I am the decision maker or a member of a standing decision-making body.
• I solve problems and advocate my ideas to decision makers.
• I lead teams to support decision makers.
• I participate on teams that support decision makers.
Live Meeting Poll
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Effective decision leaders are committed to achieving
decision quality.
Decision leaders provide five essentials. They:
They start with the end in mind, and assure that it is achieved.
Decision Leader
1. See the destination – a high-quality decision
2. Diagnose a decision situation
3. Design an effective and efficient decision process
4. Lead the decision process
5. Assess the level of quality achieved
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Achieving quality in each of six elements produces
quality in the overall decision.
Elements ofDecisionQuality
Like a chain, overall quality is no stronger than the weakest link.This is the goal of the decision-making process.
Meaningful, Reliable
Information
ClearValues andTrade-offs
Logically Correct
Reasoning
Commitmentto Action
AppropriateFrame
Creative,Doable
Alternatives
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© 2007 Strategic Decisions Group www.sdg.com
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A “spider” diagram helps gauge decision quality.
DecisionQuality
AppropriateFrame
Creative,Doable
Alternatives
Meaningful, Reliable
Information
Clear Values andTrade-offs
LogicallyCorrect
Reasoning
CommitmentTo Action
0% 100%
The 100% point is where additional effort costs more than it is worth.
®
© 2007 Strategic Decisions Group www.sdg.com
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Effective decision leaders diagnose the situation in
order to determine the best decision process.
Decision leaders provide five essentials. They:
1. See the destination – a high-quality decision
2. Diagnose a decision situation
3. Design an effective and efficient decision process
4. Lead the decision process
5. Assess the level of quality achieved
Decision Leader
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© 2007 Strategic Decisions Group www.sdg.com
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The decision leader asks the crucial questions: the
“What,” the “When,” and the “Who.”
• What is the decision?
– What is our purpose in deciding?
– Has a decision been “declared”?
– How important is the decision?
– What is the nature of the decision?
– What makes this decision difficult?
• By when does this decision need to be made?
• Who should be involved?
– Who decides?
– Who knows (who has the content that we need)?
– Who leads the decision process?
– Who should be involved to assure success in implementation?
®
© 2007 Strategic Decisions Group www.sdg.com
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A diagnosis of the situation results in an initial frame.
Decision
Quality
AppropriateFrame
Creative,Doable
Alternatives
Meaningful, Reliable
Information
Clear Values andTrade-offs
LogicallyCorrect
Reasoning
Commitment
To Action
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© 2007 Strategic Decisions Group www.sdg.com
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What makes diagnosis difficult? Each decision has its
own nature.
Content: Trustworthy inputs and insight
• Data overload or lack of data
• Constantly evolving value chains and business models
• Many alternatives or none
• Biases
• Access to expertise
Content Analytical
Org
an
iza
tio
na
l
Analytical: The logic to get the right answer
• High uncertainty
• Complex dynamics and business cycles
• Many interdependent drivers
• Multiple, interrelated value measures
• Variability in risk attitudes
Organizational: Alignment and commitment to a direction
• Fundamentally different frames and beliefs
• Group dynamics
• Values, desires, and motivations
• Habits and personalities
• Organizational structure
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© 2007 Strategic Decisions Group www.sdg.com
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Who should be involved?
Input and ExecutionResources
ProjectTeam
Responsibility for Decision Quality
Decision Maker(s)
Provide facts and judgments necessary to understand the consequences of the decision and readiness for successful execution.
Gathers content information, facilitates dialogue, analyzes alternatives, and integrates results to achieve clarity of direction and commitment to action by the decision maker(s) and the implementers.
Assures that the decision recommendation meets DQ criteria.
Has authority to approve action.
Typically the decision leader directs the project team and shares DQ responsibility with decision makers.
®
© 2007 Strategic Decisions Group www.sdg.com
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Effective decision leaders select an approach and
create the project plan: the “how” of achieving DQ.
Decision leaders provide five essentials. They:
1. See the destination – a high-quality decision
2. Diagnose a decision situation
3. Design an effective and efficient decision process
4. Lead the decision process
5. Assess the level of quality achieved
Decision Leader
®
© 2007 Strategic Decisions Group www.sdg.com
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Poll 2
How does your organization make most of its important decisions now?
• We use decision leaders to guide dialogue among decision makers and team members to a high quality decision.
• Our most important decisions are based on recommendations by strong advocates.
• Our decision-making processes are ad hoc.
• I don't know how we make our most important decisions.
Live Meeting Poll
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In complex decisions, we define separate roles for
decision makers and a project team.
Decision Board
Decision Board
Members: Decision-makers
Responsibilities: “Declare” decision, approve frame, provide values and trade-offs, and make decision
Selection criterion: A decision by this group will “stick”
Project Team
Project Team
Members: Analysts and subject-matter experts
Responsibilities: Develop frame and alternatives, assess information, evaluate alternatives, plan implementation
Selection criterion: Recognized by decision board as credible experts and analysts
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© 2007 Strategic Decisions Group www.sdg.com
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Systematic Dialogue among the Right
Participants
Create
AlternativesEvaluate
Assess
& Frame
Staged Process Driven with Deliverables
Decide
Creation of a Clear Choice
The tried-and-true SDG decision process is a good
place to start the process design.
Project Team
Decision Board
Declare &
Diagnose
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© 2007 Strategic Decisions Group www.sdg.com
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The approach, tools, deliverables, and schedule differ
greatly from one situation to another.
ContentAnalytic
al
Org
an
iza
tio
na
l
Consumer ProductMarket Entry
Assess & Frame Evaluate DecideAlter-natives
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© 2007 Strategic Decisions Group www.sdg.com
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The approach, tools, deliverables, and schedule differ
greatly from one situation to another.
ContentAnalytic
al
Org
an
iza
tio
na
l
Consumer ProductMarket Entry
Assess & Frame Evaluate DecideAlter-natives
Semiconductor
CapacityEvaluate
Alter-natives
Evaluate DecideAlter-natives
Assess& Frame
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© 2007 Strategic Decisions Group www.sdg.com
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ContentAnalytic
al
Org
an
iza
tio
na
l
The approach, tools, deliverables, and schedule differ
greatly from one situation to another.
Consumer ProductMarket Entry
Alter-natives
Evaluate DecideAssess & FrameAlter-natives
Alter-natives
Evaluate Decide
Mobile
ProviderStrategy
Alter-natives
Evaluate DecideAssess& Frame
Semiconductor
CapacityEvaluate
Alter-natives
Evaluate DecideAlter-natives
Assess& Frame
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© 2007 Strategic Decisions Group www.sdg.com
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DQ
I
V
R
C
F
A
However, all approaches, deliverables, and schedules
must drive to commitment to action that achieves DQ.
ContentAnalytic
al
Org
an
iza
tio
na
l
Consumer ProductMarket Entry
Alter-natives
Evaluate DecideAssess & Frame
Alter-natives
Evaluate Decide
Mobile
ProviderStrategy
Alter-natives
Evaluate DecideAssess& Frame
Semiconductor
CapacityEvaluate
Alter-natives
Evaluate DecideAlter-natives
Assess& Frame
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© 2007 Strategic Decisions Group www.sdg.com
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The decision and task leaders select from myriad
tools to achieve decision quality.
Content Intensive
• Brainstorming
• Market studies
• War gaming
• Experts
• Customer interviews
• Focus groups
• Pilots and prototypes
• Trial clinics
• Controlled launches
• Competitor review
®
© 2007 Strategic Decisions Group www.sdg.com
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Content Intensive
• Brainstorming
• Market studies
• War gaming
• Experts
• Customer interviews
• Focus groups
• Pilots and prototypes
• Trial clinics
• Controlled launches
• Competitor review
Organization Intensive
• Surveys
• Team building
• Competency assessments
• Learning systems
• Experts
• Personality assessments
• Organizational design
• Personal coaching
• Needs mapping
• Incentives and rewards
The decision and task leaders select from myriad
tools to achieve decision quality.
®
© 2007 Strategic Decisions Group www.sdg.com
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Content Intensive
• Brainstorming
• Market studies
• War gaming
• Experts
• Customer interviews
• Focus groups
• Pilots and prototypes
• Trial clinics
• Controlled launches
• Competitor review
Organization Intensive
• Surveys
• Team building
• Competency assessments
• Learning systems
• Experts
• Personality assessments
• Organizational design
• Personal coaching
• Needs mapping
• Incentives and rewards
Analysis Intensive
• Multiattribute scoring
• Scenarios
• Value/uncertainty maps
• Spreadsheet modeling
• Sensitivity analysis
• Probabilistic analysis
• Nonlinear optimization
• Risk profiling
• Options and gaming
• Dynamic systems
• Portfolio analysis
The decision and task leaders select from myriad
tools to achieve decision quality.
®
© 2007 Strategic Decisions Group www.sdg.com
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The key is selecting appropriate tools for the nature
of the decision situation.
Content Intensive
• Brainstorming
• Market studies
• War gaming
• Experts
• Customer interviews
• Focus groups
• Pilots and prototypes
• Trial clinics
• Controlled launches
• Competitor review
Organization Intensive
• Surveys
• Team building
• Competency assessments
• Learning systems
• Experts
• Personality assessments
• Organizational design
• Personal coaching
• Needs mapping
• Incentives and rewards
Analysis Intensive
• Multiattribute scoring
• Scenarios
• Value/uncertainty maps
• Spreadsheet modeling
• Sensitivity analysis
• Probabilistic analysis
• Nonlinear optimization
• Risk profiling
• Options and gaming
• Dynamic systems
• Portfolio analysis
®
© 2007 Strategic Decisions Group www.sdg.com
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Example: A business portfolio problem…
Content Intensive
• Brainstorming
• Market studies
• War gaming
• Experts
• Customer interviews
• Focus groups
• Pilots and prototypes
• Trial clinics
• Controlled launches
• Competitor review
Organization Intensive
• Surveys
• Team building
• Competency assessments
• Learning systems
• Experts
• Personality assessments
• Organizational design
• Personal coaching
• Needs mapping
• Incentives and rewards
Analysis Intensive
• Multi-attribute scoring
• Scenarios
• Value/uncertainty maps
• Spreadsheet modeling
• Sensitivity analysis
• Probabilistic analysis
• Nonlinear optimization
• Risk profiling
• Options and gaming
• Dynamic systems
• Portfolio analysis
®
© 2007 Strategic Decisions Group www.sdg.com
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Effective decision leaders orchestrate and lead the
activities necessary to achieve DQ.
Decision leaders provide five essentials. They:
1. See the destination – a high-quality decision
2. Diagnose a decision situation
3. Design an effective and efficient decision process
4. Lead the decision process
5. Assess the level of quality achieved
Decision Leader
®
© 2007 Strategic Decisions Group www.sdg.com
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Decision Task Leadership
Decision
Maker(s)
Decision leadership applies up, down and across the
organization.
Decision Leader
There are often different decision leaders for different decisions across the organization.
®
© 2007 Strategic Decisions Group www.sdg.com
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The decision leader often has overall project
leadership responsibilities.
For the decision maker(s), the leader:
• Knows the larger organizational context
• Keeps a finger on the pulse of the decision makers, maintaining open communication
• Monitors changes in the decision situation, and knows when to change course
• Synthesizes insights from the team’s work clearly and with incisiveness
Decision BoardProject Team
For the project team, the leader:
• Is recognized and respected by the project team members as the director of the effort
• Designs and oversees the team’s activities to build decision quality
• Monitors progress in the decision effort and knows when to change course
• Ensures quality of the team’s work products
• Manages resources and schedule
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© 2007 Strategic Decisions Group www.sdg.com
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Pacesetting: “This is challenging and exciting work. Here’s a clear set of tasks that will get us there.”
Commanding: “We have a crisis. Here’s what needs to happen.”
Visionary: “We have an important problem here.”
Democratic: “We need engagement of many different perspectives in this process.”
Declaring and diagnosing the decision
Assessing and framing the decision; Understanding values
Visionary: “We can reach alignment for this decision.”
Affiliative: “Our goals can support each other.”
Generating alternatives; Assessing information
Visionary: “We can think differently about this.”
Coaching: “Each team member and expert can help us move toward higher decision quality.”
Evaluating alternatives to understand value and risk
Reaching decisions;Building consensus
Democratic: “We all need to be aligned.”
Visionary: “With this decided, here’s what’s possible…”
Decision Stage Potential Leadership Styles*
Skillful leaders employ different leadership styles,
depending on the situation.
* Styles defined by Goleman, Boyatzis, and McKee in Primal Leadership: Learning to Lead with Emotional Intelligence (2002)
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© 2007 Strategic Decisions Group www.sdg.com
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The decision leader will often design, open, manage, and close each meeting.
An essential skill for decision leaders is facilitating
dialogue in decision meetings and workshops.
Decision Board
Decision Dialogues
Objective Leading dialogue that yields commitment to a high-quality decision
Project Team
Project Team Meetings
Objectives Designing and developing work products to build decision quality and foster alignment
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© 2007 Strategic Decisions Group www.sdg.com
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Declaring and diagnosing the decision
• One-on-one discussions and draft reviews• Kickoff presentation by decision makers• Team development or refinement of vision statement
Assessing and framing the decision; Understanding values
• Small group info review and summary of challenges• Issue raising with diverse perspectives in the group
Generating alternatives; Assessing information
• Individual idea generation and group brainstorming• Creative expansion, e.g., role plays, challenge reviews• Individual interviews using debiasing techniques
Evaluating alternatives to understand value and risk
• Interactive development of model structure• Poster session of evaluation results• Small group synthesis of key evaluation insights• Large group review and prioritization of refinements
Reaching decisions;Building consensus
• One-on-one preview of results and recommendations• Insight-focused dialogue and recording of agreements
Decision Stage Potential Meeting Designs
The decision leader designs the meeting to fit the
tasks and participants.
A good design will accommodate different personality types (e.g., introverts, extroverts, big thinkers, analytical types, etc.)
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© 2007 Strategic Decisions Group www.sdg.com
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• Expert in leading a decision-making process
• Guides the group through specific decision-related tasks
• Ensures quality of the work product from each meeting
– Manages meeting tasks to maximize quality contribution
– Challenges the team in the meeting if quality is lacking
– Tasks the team to improve quality as needed after the meeting
• Encourages and manages balanced and healthy discussion
• Keeps the group on task and on schedule; seeks group agreement on changes in task or schedule
• Adapts meeting process when it isn’t working
• Manages group interactions, but provides no technical content or judgment of quality
The decision leader manages meetings with neutral
facilitation and facilitative leadership.
Neutral Facilitation Facilitative Leadership
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© 2007 Strategic Decisions Group www.sdg.com
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Decision leaders provide five essentials. They:
So, in summary, decision leaders efficiently drive
organizations to high-quality decisions.
DQ
I
V
R
C
F
ADecision Leader
1. See the destination – a high-quality decision
2. Diagnose a decision situation
3. Design an effective and efficient decision process
4. Lead the decision process
5. Assess the level of quality achieved
®
© 2007 Strategic Decisions Group www.sdg.com
34
Poll 4
How much would your organization benefit from improved decision leadership?
• Little Benefit - We already have a group of effective decision leaders.
• Some - Meetings and workshops would be more efficient and productive.
• Significant - Decisions would be transparent and higher quality.
• Monumental - This could be transformative for our organization.
Live Meeting Poll
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Stanford University and SDG have created education
programs focused on improving decision-making.
• Directed by Professor Ron Howard, Management Science and Engineering
• Developed in partnership between SCPD and Strategic Decisions Group
• Available online, on campus, and on-site
• Meets the career-long education needs of professionals, managers, and executives
Stanford Center for Professional Development (SCPD)
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© 2007 Strategic Decisions Group www.sdg.com
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Our program comprises education for strategic
decision-making at two levels.
• Certificate program in Strategic Decision and Risk Management
– For leaders and senior managers who want toimprove decision-making by their teams
– For those who support strategicdecision-making
– On-campus sessions in March, June,and September
– What past participants have said:
- "Stanford opened my mind to a
new way of thinking that made a
significant impact on me personally.”
–Xander Uyleman
- Watch an exclusive interview with Xander:
http://scpd.stanford.edu/scpd/about/ourStudents/xUyleman.htmhttp://scpd.stanford.edu/scpd/about/ourStudents/xUyleman.htm
• Two-day senior executive seminar
– For senior executives with significant decision responsibility
– November 13–14, 2008
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© 2007 Strategic Decisions Group www.sdg.com
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The certificate program offers 2.5-day courses
spanning the breadth of decision staff skills.
DADecision
Analysis
DQDecision
Quality
AdvancedDecisionAnalysis
Modelingfor Strategic
Insight
SDRMPracticum
StrategicInnovation
BehavioralChallenges in
Decision-Making
EnterpriseRisk
ManagementStrategic Portfolio
Decisions
DecisionLeadership
Strategic Decision and Risk Management (SDRM) Program Core course
New course
Elective
Advanced
Project
Management
Program
Converting
Strategy into
Action
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© 2007 Strategic Decisions Group www.sdg.com
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2008 On-Campus Calendar
2019181716
FridayThursdayWednesdayTuesdayMonday
June
Pricing
• $2,495 per course
• $2,245 per course – early registration (register by 5/11/07 for June)
• $2,195 per course – multiple courses
• $1,975 per course – multiple courses and early registration
Prices increase January 8, 2008
Advanced Decision Analysis
CORE ELECTIVE
2827262524
2120191817
FridayThursdayWednesdayTuesdayMonday
March
Decision Quality in Organizations
Decision Leadership
Converting Strategy Into Action
Decision Analysis
Behavioral Challenges in Decision-Making
1918171615
12111098
FridayThursdayWednesdayTuesdayMonday
September
Decision Analysis
Modeling for Strategic InsightStrategic Decision and Risk
Management Practicum
Decision Quality In Organizations
Strategic Innovation
Converting Strategy Into Action
Strategic Portfolio Decisions
Enterprise Risk Management
Converting Strategy Into Action
®
© 2007 Strategic Decisions Group www.sdg.com
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To contact one of today’s speakers:
Q & AThank you for participating in today’s eBriefing, the winner of the iPod Shuffle is…
To learn more about the SDRM program:[email protected]
1-866-234-3380
Carl [email protected]
+1.650.475.4405
Jennifer [email protected]+1.650.475.4374
Paul [email protected]
+1.650.723.4008
Bruce [email protected]+1.650.475.4470
Hannah [email protected]+1.650.475.4455
®
© 2007 Strategic Decisions Group www.sdg.com
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Upcoming On-Campus Courses
March 17 - 28, 2008
Stanford Strategic Decision
and Risk Management
Certificate Program
Register at: http://proed.stanford.edu/redir.asp?J1
To visit the SDRM home page: http://proed.stanford.edu/redir.asp?J3
For more information, please contact:Patty Harris, Customer Relationship ManagerToll Free +1 866 234 3380Outside the US +1 650 475 [email protected]://strategicdecisions.stanford.edu